NEW YORK - The Federal Reserve Bank of New York announced today the thirty participants for the Investment Connection program in Puerto Rico. Aiming to enhance investments in community development financing, Investment Connection seeks to match local organizations whose needs qualify for credit under the Community Reinvestment Act (CRA) with banks and other investors.
Launched in September 2019, the New York Fed's Investment Connection program provides nonprofits, development agencies and other local actors an opportunity to engage directly with banks and other potential funders. After receiving technical and educational assistance from the New York Fed and other partners, applicants submitted funding proposals eligible under the CRA, which requires banks to lend, invest and offer services to low- and moderate-income communities in the areas in which they operate.
Participants and their proposals were selected based on a number of factors related to CRA eligibility, organizational capacity and potential impact. The thirty participants will have the opportunity to present their funding proposals to potential investors at a two-day public pitch event on January 27-28 in San Juan, Puerto Rico.
"Recent unfortunate events reinforce the need for investments to support Puerto Rico's economic recovery," said Adrian Franco, Director of Community Development Finance (CoDeFi) at the New York Fed. "The Investment Connection participants reflect the vibrancy of Puerto Rico's non-profit and economic development sectors, and their proposals seek to tackle many of the Island's most pressing challenges. The New York Fed is committed to supporting Puerto Rico's recovery efforts, and addressing the economic needs of distressed communities across our District."
"There are several routes to CRA qualification for activities in Puerto Rico, and the Investment Connection program offers a unique opportunity for investors to support these activities on the Island," said Janis Frenchak, Vice President of Consumer Compliance at the New York Fed. "The proposals released today include some that fall under the special disaster-area designation of the Interagency Statement, as well as those representing activities geared toward low- and moderate-income communities that are traditionally eligible for CRA consideration regardless of timeframe."
The participants represent organizations from throughout Puerto Rico, and their proposals address a variety of issues, including housing, renewable energy, health, education and small-business financing. The participants are seeking investments between $20,000 and $15 million. For more information on the participants and their proposals, please see here.
The Federal Reserve Bank of Kansas City created Investment Connection in 2011 to help match funders with organizations that had community development proposals. To date, the program has helped facilitate approximately $30 million from funders to community organizations.
The launch of the Investment Connection program in Puerto Rico comes after the unprecedented destruction of Hurricane Maria resulted in significant damage to vital infrastructure, homes and businesses. The government of Puerto Rico has estimated that the total cost of recovery is approximately $94.4 billion.
In the storm's aftermath, the Federal Reserve Board of Governors, along with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, issued the Interagency Statement on CRA Consideration for Community Development Activities in the U.S. Virgin Islands and Puerto Rico Following Hurricane Maria. The statement established that financial institutions located outside of Puerto Rico can receive CRA credit for supporting eligible activities on the island, providing a unique opportunity to implement the Investment Connection program.
The Investment Connection program also marks a critical step in the New York Fed's Community Development Finance (CoDeFi) Progression Model, a framework designed to support and enhance the community development finance ecosystem in the Bank's region. In addition to Investment Connection, the Progression Model outlines efforts to deepen relationships between community stakeholders and investors, provide educational resources to community organizations, and create data-driven, analytical tools for potential investors. For more information on the Progression Model in Puerto Rico, see here.